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Looking beyond averages in the trade and poverty debate

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Ravallion, Martin

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Abstract

There has been much debate about how much poor people in developing countries gain from trade openness, as one aspect of"globalization."The author views the issue through both"macro"and"micro"empirical lenses. The macro lens uses cross-country comparisons and aggregate time series data. The micro lens uses household-level data combined with structural modeling of the impacts of specific tradereforms. The author presents case studies for China and Morocco. Both the macro and micro approaches cast doubt on some wide generalizations from both sides of the globalization debate. Additionally the micro lens indicates considerable heterogeneity in the welfare impacts of trade openness, with both gainers and losers among the poor. The author identifies a number of covariates of the individual gains. The results point to the importance of combining trade reforms with well-designed social protection policies.

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Paper provided by The World Bank in its series Policy Research Working Paper Series with number 3461.

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Date of creation: 01 Nov 2004
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Handle: RePEc:wbk:wbrwps:3461

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Keywords: Economic Theory&Research; Environmental Economics&Policies; Services&Transfers to Poor; Poverty Monitoring&Analysis; Public Health Promotion; Environmental Economics&Policies; Achieving Shared Growth; Poverty Assessment; TF054105-DONOR FUNDED OPERATION ADMINISTRATION FEE INCOME AND EXPENSE ACCOUNT; Economic Theory&Research;

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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Thomas Hertel & Jeffrey Reimer, 2005. "Predicting the poverty impacts of trade reform," Journal of International Trade & Economic Development, Taylor and Francis Journals, vol. 14(4), pages 377-405, December. [Downloadable!] (restricted)
    Other versions:
  2. Datt, Gaurav & Ravallion, Martin, 1998. "Farm productivity and rural poverty in India," FCND discussion papers 42, International Food Policy Research Institute (IFPRI). [Downloadable!]
  3. Barro, Robert J, 2000. " Inequality and Growth in a Panel of Countries," Journal of Economic Growth, Springer, vol. 5(1), pages 5-32, March. [Downloadable!] (restricted)
  4. Ravallion, Martin, 2001. "Growth, inequality, and poverty : looking beyond averages," Policy Research Working Paper Series 2558, The World Bank. [Downloadable!]
    Other versions:
  5. John Cockburn, 2004. "Trade Liberalisation and Poverty in Nepal A Computable General Equilibrium Micro Simulation Analysis," Development and Comp Systems 0409012, EconWPA. [Downloadable!]
  6. Edwards, Sebastian, 1998. "Openness, Productivity and Growth: What Do We Really Know?," Economic Journal, Royal Economic Society, vol. 108(447), pages 383-98, March. [Downloadable!] (restricted)
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  7. Mattias Lundberg & Lyn Squire, 2003. "The simultaneous evolution of growth and inequality," Economic Journal, Royal Economic Society, vol. 113(487), pages 326-344, 04. [Downloadable!] (restricted)
  8. Rodríguez, Francisco & Rodrik, Dani, 1999. "Trade Policy and Economic Growth: A Sceptic's Guide to the Cross-National Evidence," CEPR Discussion Papers 2143, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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  9. repec:dia:wpaper:dt200310 is not listed on IDEAS
  10. L. Alan Winters & Neil McCulloch & Andrew McKay, 2004. "Trade Liberalization and Poverty: The Evidence So Far," Journal of Economic Literature, American Economic Association, vol. 42(1), pages 72-115, March. [Downloadable!] (restricted)
  11. Chen, Shaohua & Ravallion, Martin, 2004. "How Have the World's Poorest Fared Since the Early 1980s?," Policy Research Working Paper Series 3341, The World Bank. [Downloadable!]
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  12. Prakash Raj Sapkota & John Cockburn, 2008. "Trade Liberalization and Poverty in Nepal: an Applied General Equilibrium Analysis," Cahiers de recherche MPIA 2008-13, PEP-MPIA. [Downloadable!]
  13. Jeffrey D. Sachs & Andrew M. Warner, 1995. "Economic Convergence and Economic Policies," Harvard Institute of Economic Research Working Papers 1715, Harvard - Institute of Economic Research.
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  14. Dollar, David & Kraay, Aart, 2002. " Growth Is Good for the Poor," Journal of Economic Growth, Springer, vol. 7(3), pages 195-225, September. [Downloadable!] (restricted)
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  15. Foster, James & Greer, Joel & Thorbecke, Erik, 1984. "A Class of Decomposable Poverty Measures," Econometrica, Econometric Society, vol. 52(3), pages 761-66, May. [Downloadable!] (restricted)
  16. Edwards, Sebastian, 1997. "Trade Policy, Growth, and Income Distribution," American Economic Review, American Economic Association, vol. 87(2), pages 205-10, May. [Downloadable!] (restricted)
  17. Harrison, Ann, 1996. "Openness and growth: A time-series, cross-country analysis for developing countries," Journal of Development Economics, Elsevier, vol. 48(2), pages 419-447, March. [Downloadable!] (restricted)
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  18. Easterly, William & Fischer, Stanley, 2001. "Inflation and the Poor," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 33(2), pages 160-78, May.
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  19. Dwayne Benjamin & Loren Brandt & John Giles, 2003. "The Evolution of Income Inequality in Rural China," Working Papers benjamin-04-01, University of Toronto, Department of Economics. [Downloadable!]
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  20. Xavier Sala-I-Martin & Gernot Doppelhofer & Ronald I. Miller, 2004. "Determinants of Long-Term Growth: A Bayesian Averaging of Classical Estimates (BACE) Approach," American Economic Review, American Economic Association, vol. 94(4), pages 813-835, September. [Downloadable!]
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  21. Lin, Justin Yifu, 1992. "Rural Reforms and Agricultural Growth in China," American Economic Review, American Economic Association, vol. 82(1), pages 34-51, March. [Downloadable!] (restricted)
  22. François Bourguignon & Anne-Sophie Robilliard & Sherman Robinson, 2003. "Representative versus real households in the macro-economic modeling of inequality," DELTA Working Papers 2003-05, DELTA (Ecole normale supérieure). [Downloadable!]
  23. David Dollar & Aart Kraay, 2004. "Trade, Growth, and Poverty," Economic Journal, Royal Economic Society, vol. 114(493), pages F22-F49, 02. [Downloadable!] (restricted)
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  24. Ravallion, Martin & Shaohua Chen, 2004. "China's (uneven) progress against poverty," Policy Research Working Paper Series 3408, The World Bank. [Downloadable!]
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  25. Li, Hongyi & Squire, Lyn & Zou, Heng-fu, 1998. "Explaining International and Intertemporal Variations in Income Inequality," Economic Journal, Royal Economic Society, vol. 108(446), pages 26-43, January. [Downloadable!] (restricted)
Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Yin Zhang & Guanghua Wan, 2006. "Globalization and the Urban Poor in China," Discussion Papers 196, University of Dundee, Economic Studies. [Downloadable!]
    Other versions:
  2. Michael Tribe & Andrew Sumner, 2006. "Development economics at a crossroads? Introduction to a policy arena," Journal of International Development, John Wiley & Sons, Ltd., vol. 18(7), pages 957-966. [Downloadable!]
  3. Margaret McMillan & Alix Peterson Zwane & Nava Ashraf, 2005. "My Policies or Yours: Does OECD Support for Agriculture Increase Poverty in Developing Countries?," NBER Working Papers 11289, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  4. Gabriele, Alberto & Schettino, Francesco, 2007. "Child Malnutrition and Mortality in Developing Countries: Evidence from a Cross-Country Analysis," MPRA Paper 3132, University Library of Munich, Germany, revised Jul 2007. [Downloadable!]
  5. Rios, Ana R. & Shively, Gerald E. & Masters, William A., 2009. "Agricultural Prices and Income Distribution among Farmers: A Whole-Household, Multi-Country, Multi-Year Analysis," 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin 49314, Agricultural and Applied Economics Association. [Downloadable!]
  6. Onyeiwu, Steve & Polimeni, Raluca Iorgulescu & Polimeni, John M., 2007. "Distributional Impact of Globalization-Induced Migration: Evidence from a Nigerian Village," Working Papers UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER). [Downloadable!]
  7. Ann Harrison, 2006. "Globalization and Poverty," NBER Working Papers 12347, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  8. Aksoy , M. Ataman & Isik-Dikmelik, Aylin, 2008. "Are low food prices pro-poor ? net food buyers and sellers in low-income countries," Policy Research Working Paper Series 4642, The World Bank. [Downloadable!]
  9. Nissanke, Machiko & Thorbecke, Erik, 2006. "A Quest for Pro-Poor Globalization," Working Papers RP2006/46, World Institute for Development Economic Research (UNU-WIDER). [Downloadable!]
  10. Fosu, Augustin Kwasi & Mold, Andrew, 2007. "Gains from Trade: Implications for Labour Market Adjustment and Poverty Reduction in Africa," Working Papers UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER). [Downloadable!]
  11. Chris Papageorgiou & Subir Lall & Florence Jaumotte, 2008. "Rising Income Inequality: Technology, or Trade and Financial Globalization?," IMF Working Papers 08/185, International Monetary Fund. [Downloadable!]
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